The War for Talent rages on, and with our economy having returned to the growth mode, demand for people is on the rise as well, especially in certain “hot” labour market segments. Attracting and retaining the people you need is challenging at the best of times, but as competition for all the people with the right stuff heats up, it is critical for employers to think about the “whole picture” in terms of what they provide employees in return for their productivity engagement and loyalty. It isn’t just about the pay rate any more.
In the “good old days” employers had the “upper hand” in labour markets, and could find the people they needed by providing internally determined, cost-based pay rates and little else. Compensation was a simpler discipline. But as the “upper hand” has in the past couple of decades moved over to well- trained, highly skilled employees, employers must become more innovative. Young people entering the workforce nowadays are concerned about more than just a fair rate of pay. They are concerned with “work-life balance”, and with having flexibility in their working arrangements to allow them to handle personal or family duties as they arise. They are seeking positive, healthy working environments, fulfilling assignments, inspirational leadership and good career opportunities. They are attracted to tolerant workplaces with amenities, learning opportunities, and personal as well as professional support mechanisms.
New elements of compensation
So what an employer “offers” employees is nowadays a much wider consideration, the word compensations has a wider definition. Trends in compensation these days appear to be toward multi- faceted offerings that are more “pay for performance” oriented, offering a serious upside in compensation for serious over-achievement, and a flexible list of benefits from which employees can select what works best for them. Online presence and a very positive “brand” as an “employer of choice” have become core strategies, not optional ones. Employers need to be open to new approaches, and willing to cast aside traditional compensation “taboos” in the face of a rapidly evolving reality in the labour market.
Below is a partial list of compensation elements that have become remarkably typical today:
- Traditional base salaries or wages, fixed amounts per unit time for fixed hours of work per unit time, incremented periodically for various reason.
- Variable Pay such as overtime, commissions, incentive pay, performance bonuses and profit sharing. Variable pay is intended to offer an upside to employees in good times and for good performance, and limit downside risk for employers when performance is poor.
- Employee benefits…Life Insurance, AD&D, Disability insurances, Health, Dental and Vision Care, group retirement income plans (with company contributions), stock purchase plans, etc.
- Employee personal use of company assets, (vehicles, computers, cell phones, etc., watch out for taxable benefit issues).
- Employee Assistance Plans (EAP’s) and Employee and Family Assistance Plans, which provide confidential assistance and counselling to employees who face substance abuse, mental health, or other personal challenges difficult to confront directly with the employer.
- Flexible Working Arrangements to support improved “work-life balance” so important to today’s two-earner families. Such arrangements can include several versions of “Flex Time”, job sharing, part-time work and telecommuting.
- At-work day-care facilities.
- Allowances and extended leaves for family care challenges.
- Amenities to make the work environment more positive and rewarding…lunch rooms with subsidized meals, quiet areas for rest and focus, libraries, recreation rooms with games, prayer rooms , gymnasia and other health support amenities.
- Highly structured recognition and reward programs engaging all levels of management in catching people doing something right and rewarding it publicly or privately.
- Career development on ongoing education, partially or fully company paid.
- Job rotations for experience broadening, sabbaticals and paid leave for learning purposes, and temporary foreign assignments.
- Company and team social programs and social activity support.
- Company off-site meetings and excursions, sales meetings, reward travel, and communication sessions.
- Social media, website and other online forums for employee information exchange, management communications and recognitions, “gamification” of work, and competitive team and productivity building.
As mentioned above, this list is not exhaustive, and certainly many employers could add their own unique thoughts to the above menu.
Of course, even if everything on the above list is offered and provided, employees are unlikely to stick around for a long time in a negative work environment where they cannot have a say, and cannot have any influence on the work they do, where leadership is more “stick than carrot”, where discrimination and harassment exist, and where positive performance and career management are poor, absent or unfair.
Take a look at your own workplace and at your compensation practices, and ask yourself, with regared to my goal of keeping great employees:
”Am I an Employer of Choice?”
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